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Climate Change Technology Initiative: $4.0 Billion in Tax Incentives
THE WHITE HOUSE
Office of the Press
Secretary
For Immediate Release
February 3, 2000
Climate Change Technology Initiative: $4.0 Billion in Tax
Incentives February 3, 2000
The President is proposing a new $4.0 billion package in tax incentives
over five years to help reduce greenhouse gas emissions by spurring the
purchase of energy efficient products and the use of renewable energy (see
Table 2).
Table 2. CCTI Tax Incentives ($ in Millions) Revenue Effect
Total
FY 2001
FY01-05
Homes and Buildings
Provide tax credit for energy efficient building
equipment
-18
-201
Provide tax credit for new energy efficient homes
-82
-633
Provide tax credit for solar energy systems
-9
-132
Vehicles
Extend tax credit for electric and fuel cell vehicles
and provide tax credits for qualified hybrid vehicles
0
-2078
Clean Energy
Extend tax credit for electricity produced from wind
and closed- loop biomass; provide credits for open-loop biomass facilities and
coal-biomass cofiring; and provide credits for methane from certain landfills
-91
-976
Industry
Provide 15-year recovery period for distributed power
property
-1
-10
TOTAL**
-201
-4030
**Total may not add due to rounding
HOMES AND BUILDINGS
Tax credit to consumers who purchase new energy efficient homes. To
encourage the purchase of new energy efficient homes, consumers would receive a
tax credit of $1,000 for homes purchased from 2001-2003 that use at least 30
percent less energy than the standard under the 1998 International Energy
Conservation Code (IECC) and a credit of $2,000 for homes purchased from
2001-2005 that use at least 50 percent less energy than the IECC standard.
Tax credit for energy efficient equipment in new and existing homes
or buildings. This credit will encourage the purchase of electric heat pump
water heaters, natural gas heat pumps and fuel cells. The credit would apply to
both residential and commercial equipment. The credit would be 20 percent of
the cost of the investment, subject to a cap, for equipment purchased from
2001-2004.
Tax credit for solar energy systems. A 15 percent tax credit will
encourage the purchase by consumers and businesses of solar energy systems. The
maximum credit would be $2,000 for rooftop photovoltaic systems placed in
service from 2001-2007 and $1,000 for solar water heating systems placed in
service from 2001-2005.
VEHICLES
Tax credits for electric, fuel cell, and qualified hybrid vehicles.
Cars and light trucks (including minivans, sport utilities, and pickups)
currently account for 20 percent of greenhouse gas emissions. Tax credits for
electric, fuel cell, and hybrid vehicles will help to move advanced
technologies from the laboratory to the highway. These technologies can
significantly reduce emissions of carbon dioxide, the most prevalent greenhouse
gas.
Extend the current tax credit for electric vehicles and fuel cell
vehicles. Under current law, a 10 percent credit, up to $4,000, is provided for
the cost of qualified electric vehicles and fuel cell vehicles. The credit
begins to phase down in 2002 and phases out in 2005. The President's proposal
would extend the tax credit at its $4,000 maximum level through 2006.
Tax credits for hybrid vehicles. The credit -- available for all
qualifying vehicles, including cars, minivans, sport utility vehicles, and
pickup trucks -- would range from $500 to $3,000 for purchases of a qualified
hybrid vehicle from 2003 through 2006, depending upon the vehicle's design
performance.
CLEAN ENERGY
Tax credit for electricity produced from wind. Current law encourages
the production of electricity from wind, which emits no greenhouse gases,
through a tax credit of 1.5 cents per kilowatt hour (adjusted for inflation
after 1992). The current tax credit covers facilities placed in service before
January 1, 2002. The President proposes a 2.5-year extension of this tax
credit.
Tax credits for electricity produced from biomass. Biomass refers to
trees, crops and agricultural wastes used to produce power, fuels or chemicals.
This package of credits would: -- Extend current "closed-loop" biomass credit.
This proposal extends for 2.5 years the current 1.5 cent per kilowatt hour tax
credit (adjusted for inflation after 1992), which covers facilities placed in
service before January 1, 2002.
Provide credits for "open loop" biomass facilities. This proposal
expands the definition of biomass eligible for the 1.5 cent tax credit to
include certain forest-related resources and agricultural and other sources for
facilities placed in service from 2001 through 2005, and provides a 1.0 cent
credit for electricity produced from 2001 through 2003 from facilities placed
in service prior to January 1, 2001.
Provide a credit for cofiring biomass and coal. This proposal adds a
0.5 cent per kilowatt hour tax credit for electricity produced by cofiring
biomass in coal plants from 2001 through 2005.
Provide credit for methane from landfills. This proposal adds a 1.5
cent per kilowatt hour credit for electricity produced from landfills not
subject to EPA's 1996 New Source Performance Standards/Emissions Guidelines
(NSPS/EG) and 1.0 cent per kilowatt hour for landfills subject to NSPS/EG.
Qualified facilities would be facilities placed in service after December 31,
2000 and before January 1, 2006.
INDUSTRY
15-year recovery period for distributed power property. The
development of distributed power technologies has made it possible to generate
electricity locally at dispersed industrial, commercial, and residential
locations. Such technologies can be more energy efficient and generate fewer
greenhouse gases than conventional generation methods. This proposal would
simplify and rationalize the current depreciation system by assigning a single
15-year recovery period to distributed power property. ###